my company isn’t paying us

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A reader writes:

I work for a startup company and money is running out. Over the last year there have been several instances where the owner cannot make payroll and we are not getting paid.

The first time, we didn’t get paid for over a month. This was eventually made up (with a bit extra for “hanging in there”). For the last three months, we’ve been only getting half-pay for a number of weeks, and are still owed several thousand dollars for the missing half. This week, we simply didn’t get paid at all!

Despite this, we are expected to come into work and keep working “business as usual,” and are often expected to put in overtime too. The CEO keeps promising that the money is coming from investors and we will be rewarded for our commitment, but I seriously wonder. Most normal businesses would do a temporary layoff if they could no longer afford their staff, but this place seems to think employees should be able to work for free.

What are my options here? I can’t afford to quit and then not receive unemployment insurance because I voluntarily left a job; but I can’t afford to continue working without money either! Has anyone ever experienced this in the workplace? Is this even legal?

No, it’s not legal. Most states have laws that spell out how frequently you must be paid and how long that pay must be issued after the pay period ends. There are hefty fines, and often even jail time, for violating these laws. Some states also require a delinquent employer to pay employees a “waiting time penalty,” which is additional money on top of your normal wages.

To learn more about the law in your state and how to ask your state labor agency to get involved, go to this excellent resource from Workplace Fairness and click on your state.

Of course, as soon as you file legal action, you’re pretty much giving up on your relationship with your employer (unfair, but true). And if the money isn’t there to pay you, it’s not there, legal action or not.

So this really comes down to your judgment:  Do you have reason to believe the CEO? What do you know about the company’s finances and investors that might point you in one direction or the other? What recourse will you have if the company shuts its doors next week? What do the rest of your coworkers think?

Since I’m assuming that no one else there is happy about being expected to work for free either, can a group of you talk to the CEO and come up with a path forward that you’d be satisfied with?

And by the way, you could also file for unemployment meanwhile — if you’re not getting paid, you’re eligible for unemployment (at least in most states). If you end up getting paid for that time later, you’d have to pay it back, but it’s one option to consider. (And don’t worry that you won’t be eligible if you quit. If your reason for leaving is that they weren’t paying you, you’re going to be eligible. Not getting paid is considered a qualifying reason for leaving.)

As for the bigger picture … Personally, I’d stick it out for a very short period of time, but nothing near indefinitely. I’d probably ask myself, “If I never end up getting paid for this time, what amount of unpaid time would I be merely frustrated by and annoyed that I took the risk, and what amount would I be devastated by?”  Don’t go near the second number. And meanwhile, be actively, aggressively looking for other jobs.

{ 89 comments… read them below }

  1. Kimberlee, Esq.

    If you’re really dedicated to the company/think at some level that it really will work out, or that it SHOULD work out, consider re-negotiating your role with you’re higher-ups. If you’re willing to say “I can stick this out, and will work tirelessly to do my part to turn this around, but I need my salary to be $X starting on this date (in writing), and I need stock/an ownership stake in the company.” That way, your success (and hard work!) will be tied to that of the company.

    If you don’t like the company that much, or just can’t see yourself taking that kind of (significant) risk, then it’s time to report and walk (and I definitely wouldn’t leave this company without reporting them to the state labor peeps).

    1. Henning Makholm

      At the risk of stating the obvious: It’s fine to ask for some stock as a cherry on top of other promises in exchange for sticking out, but DO NOT accept stock in lieu of pay owed you.

      A business that is so deeply in trouble that it cannot make payroll is a business that is already effectively, if not legally, bankrupt. If it doesn’t has a definite and concrete plan for getting that cash (with a timeframe of days not weeks), it means that its existing investors have already given it up as a lost cause. In that situation, any new investor that is brought in is in a good position to get any existing (or already promised!) stock made close to worthless next to his new batch. So even if the business survives, your promised bonus stock may not.

  2. Zee

    Thanks for the website (I’m not the OP). Unfortunately my state’s website apparently does not work. I get the message “this site might have moved or you don’t have permission to view it.”

    Anyway, definitely illegal. You signed up for a job, not an internship or volunteer position. You need to determine how much and how you will rock the boat. I don’t know how you did going through a month without being paid. You must have the patience of a saint.

      1. Zee

        Let me be more specific: It’s under the wage and hour compliance category for NJ where the links do not work. Thanks!

  3. Charlotte

    It’s nice to see a “Is it legal?” question answered with a resounding no every now and then. : )

  4. Sabrina

    Maybe I have a huge attitude problem or it’s the product of being raised in a “union” household, but if my employer stops paying me, I stop showing up.

    1. Jamie

      If you have an attitude problem, then I have the same one.

      I have no union ties, but you stop paying me I also stop showing up. Immediately.

        1. class factotum

          As in, I am getting a little tired of some of my co-workers talk about the great mission of the non-profit where I work. Sure, I’d rather work here than in a place that promotes cancer or rape, but I am here for the money, not for the cause.

          1. KS

            We sound a lot alike! I interviewed at a non-profit 2 years ago that after they offered a job, they were super elusive on what the pay rate would be. They kept talking about what a great service they provide to the community and how great their mission is but wouldn’t answer on the pay amount.

            Needless to say, I thanked them and told them I didn’t feel it would be a good fit. Probably dodged a bullet there.

    2. sam.i.am

      As my mom always says, “Work: There’s a reason they have to bribe you to show up.”

      Or, the old joke I shared with my boss when I would turn in my paystub…
      HIM: You want to get paid AGAIN?
      ME: Only if you want me to show up on Monday.

      I truly don’t know what would happen if I were in this situation. This is probably why I work for a giant faceless corporation. Yes, sometimes the layers of bureaucracy suck, but I always know the check’s going to clear.

    3. Brett

      But if you stop showing up, then you’ve lost your job. So if you can’t afford that, then you’re between a rock and a hard place.

      My advice for the OP would be to start looking for a job, now. If your employer isn’t paying you they’ll shut down soon, and with no notice. Sure, it’s possible that an infusion of cash might come in, but if the company is struggling that badly then it is very unlikely.

      Lets put it this way. You’re a startup and you don’t have enough money to pay the bills. What do you do? Well if I were in that position, the last people I’d stiff would be my employees. When I stop paying them, they stop caring, they quit, they start job hunting, and I potentially get in big legal trouble. Before I go there, I stop paying my other bills. For computers, whatever else I’m spending money on. Because I can probably juggle suppliers and whatnot for a while, building up late or defaulted debts.

      If your company isn’t paying employees, then they are in their death throes.

        1. Brett

          The OP said they’re getting paid partially most of the time.

          I’m not saying quitting isn’t reasonable, just that not everyone can afford to walk away immediately.

          1. fposte

            Really, though, the problem is that they might not be able to afford staying, either, but they don’t know which situation they’re in. I’d split the difference and consider this company to be de facto offering generous time off, and cut hours to sign up for unemployment and to search for jobs. Any money that comes through in the interval is a bonus. But at this point you’re really putting money again and again into the slot machine hoping that eventually it’ll come up with a payout that covers your expenses.

      1. KS

        Yes, this is such a horrible situation for the OP. My heart goes out to this individual and the others affected. Hope a new job comes through very quickly!

    4. JT

      It depends on who much ownership (legally and personally) you have in the job.

      For example, if employees actually own or part of the company, they might agree to work for no pay because it is in their own interests to keep it going.

      In this case though, yeah, I’d be out looking for a new job instead of working.

    5. Zee

      No. From a union standpoint, all of you would be going to your place of work with large picket signs and megaphones. And the union will pay you a flat rate to do so, which probably won’t cover what you would have made had you worked instead of going on strike (but don’t dare cross the picket line).

      ^^This is not said sarcastically. You mentioned union, and I think that’s probably the first step before you’d not show up at all.

      1. Heather

        technically you’d file grievances first, then negotiate, then serve notice of strike and then strike.

        If a company stopped paying it’s employees I doubt very much a union would even strike. They’d go straight to court I would imagine.

    6. K.

      Ditto. No pay, no work. If I get fired, well, I wasn’t getting paid, so what’s the difference? I think most future employers would understand why not getting paid led to parting ways.

  5. Laurie

    Oh huh, good to know that this one *is* illegal. As I started to read the post, I figured, oh well you’re working for a startup, this is to be expected. But, I guess not. Hope the OP’s salary situation works out to his/her advantage soon!

  6. JoAnna

    I actually dealt with a similar situation back in May/June. First, our checks were late; then, when we finally got paid, the paychecks bounced. The company wired the money directly into my account a few days later (no idea where they got it), so eventually I was paid all money due me (including reimbursement for NSF fees). In the meantime I was aggressively job-hunting and I was to the point of filing a complaint with the Department of Labor.

    What ended up happening is that a portion of the company was sold to our largest client (my company had been alluding to a deal being in the works that would solve the financial problems, but couldn’t be specific until the deal was sealed), and they (the client) offered me a job (with my current company’s blessing, since I exclusively worked in the portion being sold). I happily accepted and I’m very glad, in retrospect, that I stuck it out. The company I work for now is fabulous. Still, it was a miserable time and I’m very sorry you’re going through that.

  7. Anonymous

    I have known a lot of people in creative fields who keep working for weeks without pay. I don’t understand that mentality. I can stay at home and work on my own projects for free, so why would I spend money commuting to someone else for no pay?! And for every “they worked for free because they believed in the company and now it’s worth millions” IPO story, there are thousands of “and eventually we came to work and the doors were locked and we can’t even get in to get our stuff” horror stories. I’m generally a pushover about most office politics, but the one thing I won’t tolerate is a company that doesn’t make payroll.

  8. Bridget

    I have worked in startups since 1996 and know from experience it is time to run. My paychecks have bounced if I was lucky to get one. Unless you have great stock options and the company is actively seeking a buyer of the technology the situation will not turn out well. Startups provide great experience very quickly which you can leverage in future jobs but financially they can burn you as well as mentally. Get out. This situation is a classic horror movie of you going into the dark basement alone after hearing a weird noise. Get out!!! It is unlikely you’d recoup lost wages…again experience talking. Get the unemployment because this situation could delay benefits. Good luck you!

    1. Miss Displaced

      Thanks Bridget. This is my first experience at a startup. I’ve occasionally had non-paying clients as a freelancer, which is somewhat of a different matter to deal with. There are no stock options on the table. The consensus based on the comments seems to be GET OUT, and yes sometimes I do feel as though I’m in a freakish horror movie with Stepford coworkers no less! ☺

  9. Serendipitous

    A company’s first priority in the absence of profit should be PAYROLL. You trade labor for pay.

    This reminds me of a comment in a post a few months ago where the person and their coworkers weren’t paid for 4 months! I wonder what happened in that situation.

    1. Natalie

      And in fact, legally, their first priority is payroll. In delinquency situations, payroll is the only party that gets in line ahead of the IRS.

  10. Cori

    Sadly, I lived this very scenario when my SO worked for a failing engineering company. The CEO was charismatic and my SO was easily reassured. We often went 6 weeks or more without income, yet he put in 80 hour weeks (because “otherwise the company won’t make money to pay [employees]”). It was unusual to get two checks in a month and usually only one. Sometimes it was for a week, sometimes two, sometimes back pay, sometimes, like OP, a bonus for “hanging in there”.

    I learned really well how to keep a pantry full so we would survive until the next check. This went on for 14 months until the company finally staggered to to the point that my SO would leave. (I was having no luck getting permanent work, I was taking temp jobs… when there was enough money to go around for gas or bus fare.)

    It took years for the panic attacks to stop when my cupboards had (normal for normal people) bare spots, or, heaven forbid, was only half full.

  11. Smithy

    Some years ago I worked for an Insolvency Accountant (I’m in the UK).

    It always amazed me how employees would believe their bosses tales about “sorry, we tried to pay you from the wrong account”, or “the bank has messed up the payroll” but we’ll pay you next week/month. Employees want to believe this stuff. And they would carry on working for two or three months – and express genuine surprise when the receivers moved in.

    My advice to anyone in this position is to email to themselves anything which they will need in future (I don’t mean company secrets, I mean perhaps email contacts which might be useful in your job hunt, emails praising your work – which may be useful for references – or personal letters you might have written in your lunch hour). Also delete any private emails from your account.

    Also take home any personal possessions from the office (certificates showing qualifications you have gained, photos, spares shoes etc !!).

    I promise you that one day soon, you will arrive and the door will be locked – and it will be too late to deal with any of these things.

    1. JT

      What about “The money is in gold on a ship from Europe, and it’s been delayed”?

      That was a real excuse used by management of professional bike racing team for not paying riders (who were contractors, not employees, but still….)

  12. Anonymous

    It happens in large companies, too. I had a report quit; she hadn’t been paid for 3 months. However, I am not responsible for payroll and I had no idea she was not getting paid. I was really shocked and showed it. She told me about the 3 month delay at the same time she told me the money was being deposited, so I was prepared to complain to my boss the next time I met her, but it didn’t seem urgent enough to require an immediate report. Please don’t assume that your boss is automatically informed about everything that goes on between you and the rest of the company.

    1. Construction HR

      “… so I was prepared to complain to my boss the next time I met her, but it didn’t seem urgent enough to require an immediate report.”

      Really? Notwithstanding her patience, how in the world do you justify not taking it up the chain immediately?

      ” I am not responsible for payroll and I had no idea she was not getting paid.”

      I always check with my new folks about their first/second paycheck. Usually, jokingly, asking if the check cleared.

      1. Anonymous

        I am interested in why you think I should have brought it up immediately. I didn’t because:

        1. My boss prefers to meet me. I only email her about emergencies.
        2. There was nothing that she could have done before our next meeting, since my report had already been notified that the money was being deposited.

        I’ve actually been trying to be less of an interface between my reports and the rest of the company. What else do you monitor besides paycheck?

        1. class factotum

          I think it would have been appropriate to report it immediately – even call payroll – to make sure this wasn’t happening to anyone else and to make sure there were no larger issues.

        2. fposte

          Maybe you’re dealing with stuff that I’m not considering, but why would you seek to be representing your staff less? I’m puzzled by this goal.

        3. Ask a Manager Post author

          I’d have been on the phone immediately, treating it with high urgency — because while payroll isn’t in your purview, you, as a manager, risk losing employees if they’re not being paid. This is true with other elements not in your direct control too — if your employees are being mistreated by some other area of the organization, you’ve got to advocate for them … because it’s in your interest to keep good employees happy, feeling as if the company isn’t screwing them over, etc.

          Not being paid is so serious that it warrants immediate action.

          1. A Teacher

            It would tell me that as a boss you have no clue and/or little regard for me as a person not as your “report” you make the woman that quit sound like a placeholder and not a person. Maybe there was little that could have been done but you still could have been on the phone raising awareness and taking steps to make sure it didn’t happen again.

            I teach in a school and they had my graduate hours wrong in the system my first year in the district which was a couple of thousand dollars a year difference. Not only did I call HR, the union and my principal did. Ultimately I had to take care of it but they still double checked and backed me up.

          2. Ask a Manager Post author

            I’d also add — it’s worth thinking about why your employee didn’t tell you this was happening until it was too late! Make sure that you’re encouraging your other staff to let you know if there’s anything like this going on, so that you can intervene!

          3. anon-2

            I’d also add — in some places, like my home state of Massachusetts, non-payment of wages is a felony.

            If you are a manager, and learn of something like this, and then say, “It’s not my job”… you could end up being marched out of the office one day with nice silver bracelets, especially if you were aware of the problem and nothing was done.

            YOU will be considered part of the problem.

            And if I were an employee — and went to a manager on this and got the slip, I’d probably file a legal complaint if nothing was done in a few days. And when the labor commission asked me to name names, I would name names of anyone and everyone above me that knew of the transgression.

            And let the cops handle the rest.

        4. Anonymous

          A Teacher, I’d like to explain that I name people by their relationship to me to preserve privacy and because the relationship matters; if the person were my colleague, no one would be expecting me to call HR / accounting! I really liked her a lot!

          fposte, I think I have done too much for my reports in the past and I have been doing lots of stuff that they could be doing themselves. I no longer want to call

          -IT and explain the problem with their computer and make an appointment to get it fixed
          -IT and ask them to install the program that the report is supposed to evaluate
          -any department and ask how a particular form should be filled out

          I have always represented them when they have problems, but I think I put too much energy into representing / reassuring reports who were caught lying by another department. I can’t shield them from the consequences of their actions though I continue to be willing to advise them how to fix their mistakes.

          class factotum and Alison, I knew it wasn’t happening to anyone else and I knew about a larger issue which still did not justify nonpayment! I don’t think there are issues which justify nonpayment!

          Alison, I agree with all your points, but I’m sorry, I don’t know what I should have said. I thought that if I called, they would say “what are you getting all excited for, she has been paid!” I could have told them that nonpayment for 3 months is unreasonable, but I thought their boss is the person who needs to tell them that. Therefore I intended to (and did) tell my manager to pass it up the chain and back down.

          I think I was over-involved before, but I don’t want to go to the other extreme of under-involvement, so I do appreciate your comments.

          1. fposte

            Ah, yes, you’re recalibrating your intervention meter. However, I’d say this is an instance that should still send it into the red. If somebody reporting to me hadn’t been paid in three months, I’d be immediately hitting channels to discover what the hell happened, who else was involved, and what’s being done to make sure that it never happens again. This is the kind of stuff good people quit over and companies implode from.

            And if the response really was”What are you all excited about, she’s been paid now?” Then your boss bites–hard–and it’s all the more imperative for your staff and company that you’re on top of this.

            1. Anonymous

              Okay, I now agree I should have informed my boss immediately via email. I often feel that my boss forgets issues reported via email but if it was important enough she would call me. And I don’t feel like she reacts to my complaints about other departments, but I think Alison would say that my boss is handling those issues which she considers important and simply respecting the privacy of others by not telling me anything and it is still my job to bring up these issues. Sigh. Thanks for helping me figure it out!

              1. fposte

                No problem; glad to busybody–um, help :-). And it’s also possible that your boss doesn’t have some Zen wisdom of which you know not, she’s just not so great at some of this.

        5. Zee

          1. My boss prefers to meet me. I only email her about emergencies.

          Wouldn’t you think that not being paid for the last 3 months is an emergency?

          2. There was nothing that she could have done before our next meeting, since my report had already been notified that the money was being deposited.

          So you wash your hands of it when you think everything is hunky-dory again? I would have been climbing up the chain of command, advocating for your “report,” asking questions why this is happening!

          1. A Teacher

            Anon. You refer to as your report multiple times I understand to an extent what you are saying, but at some point you could have switched tone to someone that worked for me, a colleague, someone that I valued, etc…in your semantics it seemed like you didn’t really care because it wasn’t your issue. As someone with more power, and maybe only slightly more power, you are the one that can advocate for your colleagues. The other examples you give (IT issues and reports) don’t compare to lack of payment for three months…me messing up a report and my boss helping or being involved results in the job still getting done and me being able to pay my bills. Yes, it is up to the payroll department head to come down on his/her staff, it is your job to pass that message to said dept. Head or whomever.

    2. Anonymous

      Responding to the comments that I am not enough of an advocate for my employees, I have spent many hours finding and reading the text of laws in order to present arguments to my boss and HR to get fair treatment for my employees. Before this happened, I was informed by both my union rep and a respected colleague at another institution that I could not advocate for my employee further on a different issue; she was going to have to speak up for herself if anything was to be done. I concluded that I cannot do HR’s job and become an expert on employment law and I also suspected that Alison would have something critical to say about role confusion on my part?

      However, I agree that I could have done more in the payment issue.

  13. NewReader

    What catches my eye, is that you, OP, are still with the company.
    Why? Not being sarcastic- I do actually mean “what keeps you interested in this start up?” There must be something greater going on.

    For me to keep showing up for no pay, the company would have to be implementing a plan for world peace. Ok. Not that extreme- but the greater good, the vision of the company would have to be HUGE.

    On a secondary level, non-monetary benefits MIGHT be meaningful to me. Non-monetary benefits such as new learning experiences, new contacts, and other stuff that truly enhances my professional life.

    Time frame is hugely important to me- I can do a sprint, I cannot do a marathon- physically, financially and emotionally- no marathons. If I saw NO end in sight- no normalcy on the horizon- I would have to get out.

    I had to double check you post. I see nothing there to indicate that you feel this company is special, that you have found your niche or you think your big dreams could become reality in the future.
    You do not mention feeling conflicted because “The company will be great in the future- but I can’t go to the grocery store right now.”
    Your concern stated here is “I am working without pay.”
    This tells me you are nearing the end of the road with this company. Hopes and dreams might not be there. Pay attention to that little voice inside your head – is it saying “Noooo, Go NOW!” or is it saying “stay put, keep trying”?

    I admire you, because you are willing to take higher risks. This will always be an asset for you. If nothing else you will have a better level of discernment and have a higher level of insight about the risks you are willing to take in the future.

  14. Miss Displaced

    I am the original poster who is not getting paid.

    First of all, I would like to thank Alison for positing this on her site, and for all the great comments and feedback. This is a difficult situation to be in and I wasn’t sure where to turn or what to do.

    Over the years, I’ve had the misfortune of working for a few places where paychecks occasionally bounced and the companies didn’t pay vendors or freelancers in a timely manner. I’ve also worked at a place where all employees were given mandatory 10% pay cuts (which does seem to be legal for employers to do). This is the first place I’ve worked at that just simply stopped paying employees.

    As to why I’m still there: The first time we didn’t get paid, there was a lot of paperwork flying back and forth with investors, so I could definitely see that the money was “on the way,” so to speak. The CEO did some similar financial dealings recently, so it may be that this is just another temporary setback. However, I’m really concerned because of still being owed quite a bit of back pay. The financial hole seems to keep growing and I have doubts if the company can keep up long term.

    Other reasons as to why I’m there are more personal. I landed in this job after a LONG time of being unemployed or only working temp gigs. Basically, I really needed a full-time permanent job, and was rather grateful to get one! I knew a startup company was a risk, but I was led to believe the company was on much better financial footing than they actually are. There is also something exciting about building a company from the ground up and being in on that early level of development-you get to be involved in many things that ordinarily wouldn’t be part of your job at larger companies.

    I am actively job hunting, but I am trying to be much more selective and focus on one or two particular industries that I am especially interested in. It is difficult to interview while working here; in such a small company everybody knows when you take off and my absence is duly noted. It is also tricky to explain to potential employers why I am looking for work after such a short period of time, and of course I cannot use my current employer as a reference.

    I think I will stick it out for at least one more pay period before taking any drastic action. I just felt I was going bonkers because my coworkers didn’t seem the least bit fazed by this. They just shrug as though it’s a normal part of working here. Crazy!

    Thanks again everyone for all the helpful advice!
    Ask A Manager is a very informative site and I can’t recommend it enough.

    1. Heather

      Tricky to explain why you are looking for a job? Try – they don’t pay us when they are supposed to. Simple enough.

      If my absence was noted after I hadn’t been paid more than once I’d tell them they can have my presence in the office when they PAY me. There’s no excuse for not paying staff. None. I don’t care what the finances are. You pay your people.

      1. Miss Displaced

        Heather I totally agree! The situation it horrible and really inexcusable. But when I mentioned something like that a few weeks ago while on an interview I got a “look” as though I had suddenly grown two heads!

        I don’t think potential employers view the situation the same way. I get the feeling they may view me as a “problem,” that I may be making this all up, or that I should not discuss (bad mouth) my employer in such a manner. (It’s not like I blurt out “We’re not getting paid!” I just say the company is experiencing a shortage of startup capital and that I would like employment with an organization that is more established and stable).

        1. Ask a Manager Post author

          I suspect you might be misinterpreting their reaction; they were probably shocked/stunned at your employer, not at you.

          Also, I do think it’s totally fine to say that the company’s ability to issue paychecks has become sporadic.

          1. Heather

            I agree. I don’t think that people would think you are whining but instead are shocked that you haven’t been paid.

    2. Die Umlaut

      Ah Miss Displaced I knew it was you the moment I read the letter! Finally you asked a question :D. You definitely need to get out. Have you looked into Elance.com or iFreelance for side gigs?

      1. Miss Displaced

        Thanks Umi, It was great for Alison to post my tale of woe.
        I thought I was alone, so I was so surprised to see that so many others have had non-paying employers as well.

    3. twentymilehike

      I don’t know how useful this might be, but its worth a shot! My company is really small, and our business is generally seasonal. In the winter the company will sometimes cut our hours for a few months to “make ends meet” rather than lay any one off. While there have been times when I’m so broke from a 20% loss in pay that I’d just rather see someone else walk, I’ve tried to make the most of my three day weekends!

      Anyhow, if you really want to stay there, but need to make some money now, then there is no reason why you could see about working a few less hours a week and using those hours to either work another part-time job or spend them looking for a new one. And/or if you tell them, “I’m taking time off to interview for an additional part-time job to supplement my income,” I would hope they could understand that. They don’t need to know that you are really looking for a full-time opportunity, and if you do find one you can easily say that a great opportunity came up.

      In fact, I did take a part-time once and my boss was fine with that, and was happy to serve as a reference. My company is really small (nine of us, including the owners) and everyone has always proven to be far more understanding and supportive than I expected.

  15. J

    Oh I feel your pain! And I agree: the best thing is to get out now, and prepare yourself to cut your losses. Your bit about not just working, but working overtime to keep it going really resonated with me: it’s that double talk that if you want to get paid you have to work MORE while they don’t pay you. . . . I don’t buy this whole ‘wah wah we’re starting up we can’t afford to pay yet wah wah’ attitude: my dad is an entrepeneur and I’ve watched he and my mom cut everything else in order to make payroll. That comes first.

    i was in your place a couple of years ago: it started where pay would be late a day or two, then a week. then a coworker, who had finally gotten a raise to go with a promotion after several years of not having anything, had his raise taken away. And then one day I found myself playing Russian Roulette with my coworkers and our cheques (first one to the bank would deposit, and check in, and so on and so on until one bounced). Moral got really low, really fast– our boss and CEO was oblivious, and if we brought this up, would scream at us that she was trying to save her company and we were all disloyal and it was all our fault. Near the end she stopped turning up at the office at all (except of course to come in to raid petty cash as her ‘package’ included things like the company paying for her gas and drycleaning).

    So what can you do? Get out. And don’t expect to get all of your backpay– when I left the company owed me several things according to my contract and it never happened. Look forward– you’ve learned things about how to manage something by watching how NOT to manage something.

  16. Anonymous

    Get out, get out, get out!! This is a major red flag. My fiancee worked for a company that was bought out by a young, ambitious, overeducated person who ran it into the ground. First they took away the employees health insurance, then took them off payroll and started paying them under the table. Then they stopped paying them claiming they were waiting on “investors” to come through. When he asked his boss for a w-2, his boss refused! My fiancee hung in way too long because he was inexperienced with this kind of thing and the money was good when he actually got paid. Eventually he quit, with the company still owing him thousands of dollars.
    It took a lot of threatening (legal action), but eventually he got his back pay, but meanwhile burned through our savings while looking for a new job. I wouldn’t work for someone who couldn’t pay me, even the first time.
    As my old (awesome) boss used to say: “You just don’t fuck with people’s money.”

    ps. my fiancee ended up in a job he really likes a lot better than the old one, so, blessing in disguise.

  17. D'Andre Miller

    So, my place of employment normally pays it’s employees every two weeks. We recently got our checks a week early. Unfortunately, we only received one week’s worth of pay and wont receive another check for another two weeks. I guess my question is; is it legal for an employer to do this with out prior notice? I mean it’s really frustrating when you have bills to pay on certain days and you don’t have the funds available from your employer.

    1. Ask a Manager Post author

      Most states have laws that specify how frequently you must be paid and/or how soon after a pay period ends. Laws don’t generally require that they give you notice if they change that schedule, but what you’d want to look at is whether the change puts them in violation of that law. To find the law for your state, I’d do a search like this:

      (state name) paycheck law

  18. Bryan

    Basically, your employer is stringing you along. If you can afford to work for free, keep showing up. Draft a letter asking your employer for your due wages and get it mailed via return receipt. File a claim with the labor board and then wait. If you you seem to be going nowhere, the sabotage is in order. Take them down using every dirty trick possible then when you’re fired, file a UI claim and kick back for a year!

  19. Grace

    I have discovered a whole new source of revenue: reporting tax cheats to the IRS Whistleblower unit. When I go for job interviews and somebody offers to pay me as an independent contractor (illegal in my state – California – for what I do and an IC is strictly defined by the IRS and my state’s tough new laws), I simply turn them in. Ditto for job ads that are illegal and they are paying people as ICs, etc. When I hear of a company not paying employees, I simply turn around and report them to the IRS. The government wants their money. The IRS and the states have sharing agreements, and the federal government and the states communicate about suspected tax cheats. The dear IRS sends me the forms to claim my rewards for turning in the deadbeats.

  20. shrivastava

    hi..i were working for a company .and they r using their marketing department for fraud cases..and also not giving payment of that work…they r paying only for the initial month…i didnt get paid for the 4th and 5th month and finally i left the organisation…plz tell me where can i complaint ?

    1. Evan the College Student (now graduated)

      Not true; I’ve been paid on time for all my nonunion summer jobs so far. One time my last check was a bit late, but even then all the other checks were right on time.
      (I was just looking through old posts, found this comment, and thought I’d reply for the nonexistent record.)

      1. Jamie

        Ha – love that you updated the nonexistant record.

        FWIW I, too, have been paid on time at all my jobs without benefit of a union.

      1. Windchime

        Yep, I think the only job where I wasn’t paid on time was 30 years ago, at an independently owned grocery store chain. That was in the days before direct deposit, and the checks somehow didn’t get written on time. But we got paid the next day. Other than that, I have never NOT been paid on time.

  21. Emm

    I’m dealing with a similar situation. I am a subcontractor who works for many companies. One of my companies (I work for them a couple times a month) has managed to get behind on paying me by a couple hundreds of dollars. We are on net-30 terms as clearly stated by them and they are about two weeks past the net-30 deadline. Now they’re telling me that they are waiting on funds from investors and late payments from distributors.

    I’m unsure how long I should wait before threatening/taking legal action

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